Shares in IOL Chemicals and Pharmaceuticals have jumped more than 25 percent in July.
According to media reports, price of IOL Chemicals' Ibuprofen pain medicine have spiked nearly 15 percent domestically and about 25 percent globally on the back of supply crunch.
Potential reasons for the spike in shares could be linked to the surge in Ibuprofen prices. The price spikes comes after German chemical company BASF temporarily shut the production of Ibuprofen at one of its US plant owing to a technical problem.
Reports suggest there is no new capacity of Ibuprofen coming up barring the BASF capacity addition that is expected in 2021.
IOL makes active pharmaceutical ingredient (API) and bulk drugs and Ibuprofen is its flagship product. Ibuprofen accounts for about 85 to 90 percent of the company's pharma sales. The company derives nearly 40 percent of its Ibruprofen sales from India while 40 percent comes from sale in Latin America and Europe.
However, with this reported shortage of Ibuprofen in the market, IOL stands to gain as it is one of the largest manufacturers of Ibuprofen with an installed capacity of 7200 tonnes per annum and accounts for about 20 percent of global capacity.
First Published: Jul 31, 2018 3:17 PM IST
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